Question

Prepare adjusting entries. Labs Debit Credit Supplies $14,400 Prepaid insurance 3,600 Equipment 37,800 Notebook Accumulated depreciation equipment $ 9,450 Unearned revenue 9,300 Notes payable 30,000 Rent revenue 30,000 Salaries expense 14,000 An analysis of the accounts shows the following: 1. The equipment has a four-year useful life. 2. One quarter of the unearned rent is still unearned on March 31, 2021. 3. The note payable has an interest rate of 6%. Interest is paid every June 30 and December 31. 4. Supplies on hand at March 31 total $850. 5. The one-year insurance policy was purchased on January 1, 2021. 6. As at March 31, a tenant owed Bourque $700 for the month of March. Instructions Prepare the quarterly adjusting entries required at March 31, 2021. Ad Boar AP During 2021. Aubergine Co. borrowed cash from Chartreuse Company by issuing notes payable as follows: Aa 4

Answer 1

Q 1: Adjusting Entries:

Date	Account title and Explanation	Debit	Credit
Mar 31,2021	Depreciation expense [37,800/4 years] x 3/12	$2,362.50
	Accumulated depreciation-equipment		$2,362.50
	[To record depreciation expense]
Mar 31,2021	Unearned revenue [9,300 x 3/4]	$6,975
	Rent revenue		$6,975
	[To record revenue form unearned revenue]
Mar 31,2021	Interest expense [30,000 x 6% x 3/12]	$450
	Interest payable		$450
	[To record accrued interst expense]
Mar 31,2021	Supplies expense [14,400-850]	$13,550
	Supplies		$13,550
	[To record supplies expense]
Mar 31,2021	Insurance expense [3,600 x 3/12]	$900
	Prepaid insurance		$900
	[To record insurance expense]
Mar 31,2021	Accounts receivable	$700
	Rent revenue		$700
	[To record accrued rent revenue]

Q BE3.11)

Interest expense on six months note [Jan 1 to May 31] = $50,000 x 6% x 5/12 = $1,250

Interest expense on three months note [Apr.30 to May 31] = $20,000 x 5% x 1/12 = $83.33

Adjusting entry:

Date	Account title and Explanation	Debit	Credit
May 31,2021	Interest expense [1,250+83.33]	$1,333.33
	Interest payable		$1,333.33
	[To record accrued interest expense]